The cash-strapped Philadelphia School District is paying the for-profit management company Edison Schools Inc. more than $1.6 million to educate 2,196 students who do not exist…. The School Reform Commission in May 2005 decided to maintain the per-pupil funding level for 12,591 students in Edison-run schools, even though the combined enrollment at the company's schools had been dropping since the contract began in 2002….

That puts an extra $1,647,000 in the coffers of the New York-based company whose entire contract this year is worth $9.44 million, Todd McIntire, general manager for Edison's Philadelphia schools, said yesterday…. He defended the contract, saying it was the district's idea because the company was losing students due to the district's initiative to phase out middle schools in favor of schools with grades K through 8. “[T]here was not a reduction in our costs," McIntire said. "Most of our costs are driven on a school-by-school basis, as opposed to a student-by-student basis. That means that as our enrollment was declining, our costs were not."

Cecilia Cummings, the district's senior vice president for communications and community relations, said the law that placed the district under state control in December 2001 requires that $25 million in extra state funding be spent annually on the six private school-management organizations, including Edison, the nation's largest for-profit manager of public schools…. One other manager, Universal Companies, receives funding for 87 students above its actual enrollment, a district spokeswoman said…. The six managers' contracts are up for renewal this spring, and could be halved to help balance the district's 2007-08 budget, district chief Paul Vallas said this week.

Mensah M. Dean, Philadelphia Daily News, March 9.